Nothing has happened at the Nou Mestalla construction site for 12 years. Unexpectedly, in August, an opportunity turned up to resume work thanks to funds guaranteed by the agreement with CVC Capital Partners.

British private equity fund throws lifebuoy

Spanish clubs that have agreed to CVC Capital's terms will receive 40-year low-interest loans. In return, CVC secured 9% of the profits that the Spanish league is to generate over the next 50 years.

In the case of Valencia, the conditions of the contract provide for a loan of around € 120 million, 70% of which must be allocated to infrastructure improvements. In such a situation, "Los Che" could spend € 84 million on Nou Mestalla. Its completion is estimated at € 100 million, so it really won't be far away from reaching the assumed amount.

© Ravave

The club is threatened with penalties for the lack of progress in the construction of the stadium, which may be equal to € 12.36 million. These sanctions relate to two phases into which the investment was divided. Valencia CF was obliged to build the venue (second phase) under the ATE document (Strategic Territorial Action), which was concluded with the authorities in 2015 on favourable terms for the club.

On August 20, the deadline for "Los Che" to present details of when the facility would be completed expired. However, just before that date, Valencia asked for a little more time. This was due to an unexpected cash injection from CVC Capital.

Local authorities pushing for the stadium

The Generalitat Valenciana (various self-governing bodies of the Autonomous Community of Valencia) was ready before the above-mentioned deadline to initiate legal proceedings regarding a violation by Valencia of an agreement concluded six years ago and revocation of the ATE.

For the time being, the club has not been subject to any sanctions and the ATE has not expired either. The whole situation is being analysed by a team of lawyers. The Generalitat also says it still doesn't know what Valencia intends to do with the money from CVC Capital.

© Valencia CF

"Los Che" were thus pushed to the wall by local authorities. As a result, they decided to file a complaint with the Ministry of Economy against the city council. According to the club, the Valencia City Council is responsible for delays in the urban plan of the new stadium (ATE). The city replied that the football club had failed to complete any of the five steps planned for the second phase.

It is hard to disagree with the mayor of Valencia, Joan Ribó, who says that Valencia CF should stop delaying the construction of the arena in the light of a multi-million loan from CVC Capital. However, voices from Valencia-related circles are being heard that the club would like to obtain an extension of the deadline for completing the stadium, even for 2030.

Meriton promise but guarantees are needed

Earlier today, Las Provincias daily newspaper has confirmed that Meriton Holdings (managing Valencia CF) have written a commitment letter to the Generalitat, reassuring local authorities that most of the extra revenue will go towards the stadium. 

But the letter, although welcomed warmly by local authorities, might not be enough to convince everyone. Councilor for the Treasury and in the Valencia City Council, Borja Sanjuán, appreciated the letter but treats it as another form of expression of intent, not a binding document.

Now we must be prudent and continue to be demanding, because what we have on the table is nothing more than a declaration of intent. And what the situation legally requires is that guarantees and endorsements be provided that the stadium is going to be completed. Therefore, what we have now is to demand from Meriton that after this declaration of intentions come the facts. And the facts have to come, in this case, via guarantees and via endorsement that assure the city of Valencia, to the administrations and also to the Valencians that the stadium is going to end. Borja Sanjuán said.

Author: Tomasz Sobura